With the Dollar bouncing to its highest level since the partial government shutdown began, investors are revealing their optimism as Republicans hinted at an extension of the debt ceiling.
Risk aversion continues to test the patience of USD/JPY bulls bears. While many - if not most - fundamentals are Japanese yen bearish (therefore USD/JPY bullish), the main story is the continued risk OFF environment created by the U.S. government shutdown and all the ramifications in that wake: the taper, debt ceiling, debt default, equities support. Today the focus is the equities market.
As the dust settles on the non decision regarding the Fed tapering, the market has spoken. The Euro was able to get a reprieve as it gained on the Sterling marking its largest weekly advance in months as the morale in Europe has increased.
With FOMC on the horizon later on today the Dow could be in for a huge move. The question of the day is which way is the Equities market going to go.
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